(Bloomberg) -- Match Group Inc. shrugged off the threat of competition in online dating from Facebook Inc., raising its revenue and profit forecasts and saying it doubts the social media giant will have much of an impact on its business.
The Dallas-based company, which owns apps like Tinder and OkCupid, said revenue will be $1.6 billion to $1.7 billion in 2018, up from its previous projection of $1.5 billion to $1.6 billion. Profit will be higher too, mostly because more people are signing up for a new premium feature on its flagship Tinder app than the company expected. First-quarter revenue and profit beat analyst estimates as well, the company said in a statement Tuesday.
The positive forecast comes just a week after Facebook said it will jump into the dating market, a move that sent Match’s shares plunging the most in its history. Now, Chief Executive Officer Mandy Ginsberg is pushing back, saying the business is booming.
“We do not think that Facebook dating is going to have a negative impact on Tinder,” Ginsberg said in an interview. “We do have the advantage of being a single-focus business, unlike the new competition.”
Investors haven’t been so sure. Match’s share price hasn’t recovered since the 22 percent drop spurred by Facebook’s announcement. Beyond the fear of direct competition from a well-capitalized giant that already has more than 2 billion users worldwide, there’s also the possibility Facebook could cut off Match from using the social network to let users authenticate their identity.
That isn’t a concern for the company though, Ginsberg said. Last year, Tinder started letting users verify that they were real people by receiving a text message. That method quickly became much more popular than logging into Tinder through Facebook and now is used by about 75 percent of customers, she said. Tinder’s matching algorithms also don’t tap into Facebook or other third-party data providers, according to a company presentation.
“People don’t want to mix Facebook and their dating lives,” Ginsberg said.
The results also highlight how important Tinder is to Match, which owns several other dating apps targeted for different demographics and has sought to acquire more.
“They’re not going to always grow at the same time and the same rate,” Ginsberg said of the company’s different apps. There are “wins and headwinds” facing the non-Tinder apps, she said.
Match also settled a patent dispute with Chinese dating app TanTan, which Match claimed had copied its app design. TanTan will re-design its U.S. app and pay Match annual royalty payments, the company said.
©2018 Bloomberg L.P.